Originally Posted by
babs
What regional airlines are considered in the IAI calculations? Are only airlines with similar fleet types included or would airlines like Great Lakes/Gulfstream/etc. be included?
For Pilots we are not sure, but CEO compensation at Eagle is adjusted based on the following, enjoy
By the way I don't see any regional airlines mentioned there.
The Process the AMR Compensation Committee Used to Determine Compensation
Each year, the AMR Compensation Committee conducts a comprehensive review of its executive compensation program. In 2010, the AMR Compensation Committee concluded its annual review in May, prior to entering into the Assignment Agreement with Mr. Garton. As part of this review, the committee used several tools to structure its compensation programs to meet AMR’s objectives. These tools included benchmarking, internal equity data, and input from Mr. Arpey, Chief Executive Officer of AMR, each of which is discussed further below. In addition, the AMR Compensation Committee also used peer group analysis and tally sheets to analyze Mr. Garton’s compensation.
Benchmarking and Peer Group Analysis
AMR’s Compensation Committee believes that it is important that AMR’s executive compensation program is in line with other airlines and sufficiently competitive to retain the officers of AMR and its subsidiaries and to attract talent from other industries when needed. The committee reviewed the following reports in 2010:
Peer Group Analysis. The peer group analysis was prepared by American’s Human Resources department. This analysis compared the compensation of Mr. Garton to compensation paid to his peers at AirTran Airways, Alaska Air Group, Continental Airlines, Delta Air Lines, JetBlue Airways, Southwest Airlines, United Airlines and US Airways (the “Peer Group”).
Executive pay in the airline industry has been highly variable during the past decade due to bankruptcy proceedings, mergers and volatile economic and industry conditions. Executives at several airlines in the Peer Group did not receive equity grants for several years or received substantial equity
awards following mergers with other carriers or the emergence from bankruptcy. To help smooth this variability and provide more meaningful comparisons, the Peer Group analysis in 2010 included both granted and realized pay and averages of both over the last three years. The AMR Compensation Committee did not target a specific pay level or rank among the Peer Group. Instead, the committee’s objective was to ensure that Mr. Garton’s realized compensation was generally in line with his peers in the Peer Group. The analysis showed and the committee determined that the realized pay for Mr. Garton was in line with the Peer Group for the period 2007 through 2009.
Benchmarking Report. Hewitt, the AMR Compensation Committee’s consultant, prepared a competitive market analysis that compared the compensation of Mr. Garton, Mr. Hutchinson, Mr. Hazy and Mr. Cleveland to the compensation paid to their peers at 28 companies in the comparator group shown below (the “Comparator Group”). These companies were selected from Hewitt’s database of participating survey companies because AMR shares one or more of the following characteristics: (a) comparable revenue size (with AMR’s revenue being approximately at the median); (b) operations in multiple locations across the United States; (c) similar labor requirements; (d) headquarters in the Dallas-Fort Worth area; and (e) comparable management structures so that job comparisons are meaningful. The companies in the Comparator Group for 2010 were:
3M Company
Alcoa Inc.
The Boeing Company
Burlington Northern Santa Fe LLC Caterpillar Inc.
The Coca Cola Company
CSX Corporation
Deere & Company
FedEx Corporation
General Dynamics Corporation
The Goodyear Tire &
Rubber Company
H.J. Heinz Company
Honeywell International, Inc.
J.C. Penney Corporation, Inc.
Johnson Controls, Inc.
Kimberly-Clark Corporation
Lockheed Martin Corporation
Northrop Grumman Corporation
Raytheon Company
Sara Lee Corporation
Target Corporation
UAL Corporation
Union Pacific Corporation
United Parcel Service, Inc.
United Technologies Corporation
Weyerhaeuser Company
Whirlpool Corporation
Xerox Corporation
The Comparator Group analysis focused on both annual total compensation and each pay element — base, short-term incentive and long-term incentive pay. For each of Mr. Garton, Mr. Hutchinson, Mr. Hazy and
Mr. Cleveland, the AMR Compensation Committee generally targeted the median total compensation for similar positions at companies in the Comparator Group. However, the committee benchmarked Mr. Garton’s pay to the head of marketing and the chief financial officers in the Comparator Group analysis because of his
(a) contributions and broad skill set; (b) oversight of a large operating group, our flight attendants, in addition to his marketing responsibilities at that time; and (c) prior experience as a chief financial officer of a company in the airline industry.